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Saturday, February 28, 2015

Massachusetts Attorney General Martha Coakley is investigating Santander, the Spanish bank with US headquarters in Boston, for suspicious auto lending practices, which appear similar to, but on a less catastrophic scale, the subprime mortgage scam that led up to the collapse of the U.S. housing market in 2008. Santander Consumer USA (SCUSA), the bank's branch specializing in car loans, has been in partnership with Uber and offering low payments to potential car buyers who would like to drive on the Uber platform.

Coakley has subpoenaed the records of Santander Consumer USA for its borrowers credit scores, the interests rates they were charged, and how the loans were pitched to investors, Brad Puffer, a spokesperson for the AG told the Boston Globe, which added in its report that "Coakley took a similar approach in investigations of subprime mortgage lending a few years ago."

Santander isn't the only bank being questioned, Puffer told the Globe. Coakley has questioned a number of other auto lenders across the state. The investigation in Massachusetts coincides with similar investigations by other state attorneys general across the country.

As is usually the case with Uber, any involvement the widely popular and controversial ridesharing company may have in Santander lending loans to unlikely-to-pay borrowers would appear to be indirect. However, neither Santander nor Uber has been shy about offering low rates to prospective drivers looking to get on the road.

On its website, Uber states that one can apply for customized car financing options in order to drive for Uber. Deals would be arranged through Uber and its partner, Santander Consumer USA.

Here are the details Uber shares about the program:

It's available only for Uber partner drivers, who must pass a "City Knowledge Exam" at the Uber office.

Drivers are asked to fill out a consent form, authorizing Uber to share data with SCUSA – and only SCUSA.

Drivers are allowed to choose an eligible uberX, UberBLACK or UberSUV vehicle and set up an appointment with a "corresponding SCUSA Uber Select Dealer."

After selecting a whip and setting up an appointment, drivers must bring their down payment to the SCUSA dealer, who will "walk you through the application process." Insurance is also required.

Once a driver has signed a contract, he or she will be asked to provide proof of insurance to the dealer. If all checks out, then it's time to drive.

Uber's pitch: This lease-to-own financing is "Affordable, easy to qualify and simple." Partner drivers, Uber claims, can receive payment offers as low a $17 per day. Drivers can drive the miles they need in order to "earn what you want." And, at the end of the lease term, drivers who have provided a deposit can "own the car for $1."

Here's a sample of eligible Uber vehicles.

Uber has been trying aggressively to add drivers on its network, using low-rate auto financing as its hook, for more than a year. In November, 2013 blog post, Uber CEO Travis Kalanick, in light of widespread expansion into new markets, announced, "in true Uber fashion, we're finding innovative ways to power billions of dollars in car purchases."

The goal of the pilot program – which was launched in Boston, San Francisco, Dallas, Chicago, New York and Philadelphia – was for Uber, in partnership with carmakers General Motors and Toyota, as well as "leading financial institutions," to lower operating costs for drivers and get more cars on the road.

Wrote Kalanick:

The key to this new platform? Uber partner-drivers have a robust, reliable cash flow through the Uber platform – every fully utilized car on the Uber system grosses over $100,000/year. That kind of cash flow lowers the risk of financing drivers and means better access to cheaper credit than otherwise available on the open market.

The business model seems simple and, at least in theory, rather brilliant: add jobs by giving people a way to finance their own business – their cars they plan to drive for Uber – for cheap. Lenders' risk would be minimized because they wouldn't just be lending borrowers money for a car; they would be kickstarting a proven money-making business.

But, since November, 2013, Uber rate cut after rate cut has been eating away at drivers' fares. In order to make the $50,000 or more a year Uber has said can be made, drivers have been forced to drive longer hours and more miles.

"Yes! Im trying to turn in my car right now now. Im stupid and I didn't read the contract. The interest was in there even though Uber said there woulnt be any interest. I know for next time...that there is no such thing as "no interest" when leasing. (again...Im stupid)

Uber said my chrysler 300 would be UberBlack one day in LA. Then after we get the car, we find out my car will NEVER be UberBlack in LA.

They lied about the gas milage too. 20mpg. NOT 31MPG!!!

They lied about "no penalties" for canceling the lease. Lies and more lies. Now I gotta pay $2,100+ just to give the car back.....but first santander has to get off their asses and "OK" it to the car dealer before I can turn in, otherwise its a liability for the dealer.

I feel like a shmuck.

Oh yeah! ...and also I quit working because of these shitty new rates.....so yeah. Im done with driving...at least with this crappy lease and way too expensive car.

I wish someone else would come forward and admit they got suckered too so I don't feel as bad."

I feel sorry that you gotten taken advantage so badly. The promoters of the Santander deal should be criminally prosecuted for fraud. Yes, lying in that way constitutes fraud. And LYING is a core corporate value of Uber, it is the fundamental premise on which the business has been built.

Other commenters provided mixed reviews about Uber-Santander car financing. "I am on the Santander program and have not noticed much of a difference in being able to make it out here," one commenter wrote.

"I almost took the Santander deal," wrote another, adding: "Very glad i did not, to really make a dollar you have to hustle, not to mention be all over town. Trust me I will find a way for Uber to work for me, on my terms... I see the company is not looking our for their 'partners.'"

Santander Consumer USA, Uber's partner, has received the most complaints for auto lenders in the US Consumer Financial Protection Bureau’s database, according to the Globe report. Through September of this year, the company has repossessed 166,000 cars, which is about 12 percent of the total amount – 1.4 million – cars repossessed by US lenders in all of 2013.

Editorial Comment :

This story was buried over the Christmas Holidays and would have slipped by unnoticed, if it hadn't been spotted by our ace researcher J.

Friday, February 27, 2015

London’s blue “Boris bikes” are to be painted red under a seven-year sponsorship deal with Santander worth around £7m a year, it has been announced.

The Spanish bank will take over the branding of the cycle hire scheme from Barclays, marking the end of a contract that attracted criticism for failing to cover the costs of the scheme, as the UK capital’s mayor, Boris Johnson, had pledged.

Questions were also asked about how Johnson had arranged the original deal, which Barclays decided to cut short rather than pursue until 2018.

The scheme, which enables short bike trips between docking stations around central London, has proved increasingly popular since it started in 2010, with more than 10m hires in 2014.

Santander will pay £6.25m a year for the rights and contribute a further annual £1m to promote and grow the scheme.

The mayor said the money would pay for new bikes, extra docking stations and a new app to make the scheme easier to use. Johnson added: “If anyone still persists in calling them ‘Boris bikes’ rather than Santander I will change my name to Santander Johnson.”

He said the money would not cover the entire costs, but said: “We have got to defray the costs to the taxpayer with a great big dollop of private sector cash.”

Asked whether the red colour-scheme was a belated recognition of his predecessor Ken Livingstone’s launch of the cycle hire plan in 2008, Johnson said: “It was never a plan. He had no budget, no sponsorship and no idea what to do.”

He added: “The colour has no political significance whatsoever. The bikes will now match London’s buses, phone boxes, and everything else that’s red.”

Green politicians in London welcomed the extra money for cycling and called for the scheme to be expanded, especially in parts of south London, but said there were “concerns over some of Santander’s international activities and its suitability as a sponsor”.

Assembly member Darren Johnson said: “The mayor should be using the extra money to review the whole way that cycle hire works. There are still complaints about over charging and the lack of compatibility with Oyster or wave and pay.”

Construction will start on two new segregated cycle superhighways in the next two months, to be completed later this year.

Johnson said the investment in cycling would improve safety. He said cyclists also needed to change their behaviour, adding: “It’s to do with educating cyclists, nabbing people who jump the lights and put themselves at risk. People can come hideously to grief.”

Ford is experimenting with its own "Uber-like" ride-sharing app, the Washington Post reports.

The US car manufacturer is toying with the idea of rolling out its own fleet of cars in what it calls a "dynamic social shuttle."

According to the Washington Post, Ford's app and vehicles could be tested on the streets of London as early as this year. Nothing is certain at this point and plans are still in development, but speculation has begun about when and how the company will roll out the project.

It looks like Ford is trying to tap into the area between complete city coverage, as taxis and black cabs do, and buses and routed public transport.

John Abernethy, Ford's project lead in the UK, told the Washington Post: "There is a white space for a new product. Between a taxi and a bus is a space for something else." Ford says the service could be faster than taking a bus, but cheaper than an UberX — yet nestled neatly in between the two, in terms of market and customer use.

Ford announced this project as one of a host of developments in January. Venturebeat says the motor company is hoping to carry out 25 experiments in cities around the world to test new driving models and initiatives. Most involved car sharing, Venturebeat adds.

At the time, CEO Mark Fields appeared to hint that Ford's plans were inspired by the likes of Uber, Lyft, and Sidecar. There's a huge trend for ride-sharing and Ford's CEO noted during CES that today's demographic seems less inclined to actually own cars.

Nobody knows when we'll see "Uber-like" Ford vehicles rolling around London. As the Washington Post notes, Abernethy and his team haven't yet identified who a Ford app customer would be, and what cars would best suit the service. (The Ford Transit has been noted as a possibility.)

At this point, it looks as though shuttle buses directly to airports are the most likely first step. Ford has been putting together an app that matches riders with a mode of transport, probably a sort of "premium mini-bus." The Washington Post highlights this as the company's vision: A high-end, on-demand pooling system. Whatever it's doing, Ford could really shake up public travel.

Thursday, February 26, 2015

The Mayor and Transport for London (TfL) have confirmed plans to develop and expand the number of taxi ranks in the capital as part of ongoing work to support the trade and to better meet the needs of drivers and passengers.

Today, Transport for London (TfL) formally responded to the London Assembly Transport Committee's 'Future Proof' report, which examined taxi and private hire services in the Capital. Sir Peter Hendy CBE, London's Transport Commissioner, gave evidence to the Transport Committee and announced the publication of two action plans that will develop taxi ranking arrangements and the provision of taxi services in the suburbs.

More than a third of the 70 million taxi journeys completed in London each year originate from a taxi rank. Ranks are also of particular importance to passengers with mobility issues or those starting their journey in suburban areas. In recognition of this, TfL has today published a Taxi Rank Action Plan. The Plan sets out ambitious plans to expand the network of 500 taxi ranks that TfL has appointed, with £600,000 funding to further increase the number of ranks by 20% by 2020.

TfL has also confirmed it will undertake a strategic review of rank provision across the Capital - which will be completed by early 2016 - and will inform plans to introduce new ranks. A dedicated taxi ranks web page will be created - to inform both drivers and passengers - and this information will be made available to app developers. The Plan also contains a proposal to explore sponsorship of late night marshals at key taxi ranks.

Of the 25,000 licensed taxi drivers in London, around 3,500 are suburban drivers who are licensed to work in one of nine suburban sectors - providing a valuable service to passengers in outer London. Following a review of suburban taxi service, which included two trade workshops and a public consultation, TfL has today launched a Suburban Action Plan. This sets out plans to ensure that suburban taxi services continue to cater for demand in outer London as the population of the capital continues to grow.

The Plan explores the possibility of creating more Island Ranks - that allow suburban drivers to pick up passengers on the edge of their licensed area. TfL has established seven Island Ranks, including Finsbury Park, Putney Station and Garrett Lane, and plan to introduce more - informed by the strategic review of rank provision. It also includes a commitment to complete a survey to ensure a better understanding of supply and demand and inform future policy.

In addition, as part of a new approach by the Mayor and TfL to work with the industry on the issues it faces, a new Taxi and Private Hire Terms of Reference Group will be created to consider the future developments of both the taxi and private hire trades. TfL will also establish a regular forum to discuss taxi issues with suburban drivers alongside established trade representatives.

Mayor of London, Boris Johnson, said: `These plans deliver on my commitment to listen to the taxi trade and to help it to continue to offer passengers a first rate service that is the envy of the world. Boosting the number and the type of taxi ranks we have - particularly in the suburbs - is central to this aim and will help to ensure better business for cabbies and an even better service for customers.'

Sir Peter Hendy CBE, London's Transport Commissioner, said: `London's taxi and private hire services are the envy of the world and, under our oversight, are thriving. Customer satisfaction rates are high and our robust enforcement work with police colleagues means journeys in taxi and private hire vehicles have never been safer.

`However, we are not complacent and recognise that both the taxi and private hire trades must move with the times and keep pace with technological advances.

We have carefully considered the Assembly's recommendations and I'm pleased that several are already in hand; and have today published two further action plans to develop the services offered to passengers.'

TfL has also announced that an over the counter service for taxi and private hire driver license applications will be introduced in June, meeting a long-standing aspiration of the trade and providing drivers with the option to hand in documentation or speak to someone face-to-face about their application, if they wish to do so.

One proposal from the public consultation that will not be taken forward, due to a lack of consensus amongst drivers themselves, is a proposal to reduce the number of suburban sectors.

TfL is responsible for licensing 100,000 taxi and private hire drivers, 85,000 taxi and private hire vehicles and 3,000 private hire operators and is the largest licensing authority in England and Wales and is responsible for licensing over a third of all services.

TfL's regulation of the taxi trade is widely recognised as the best in the world. The rigorous Knowledge of London examination coupled with the Conditions of Fitness, which require every taxi to be fully accessible, mean an exceptionally high standard is required.

TfL's response to the London Assembly Transport Committee 'Future Proof' report is available, on request, from the TfL Press Office.

Editorial Comment:

Lots of good stuff here including some common sense not normally seen with TfL commitment.

The reintroduction of counter services is long overdue.

The Mayor has made a commitment to extend our network of Taxi ranks and has made £600 available. But before we all start thanking him graciously, it should be pointed out that this is close to the sum TfL cut from the ranks budget over the past 15 years.

This plan is a reversal of TfL's agenda to revoke ranks, giving our road space over to bus resting areas and Boris bike placements. Over the last 15 years our rank spaces have been either cut back or moved, with many important standings disapearnt altogether. It seems that when a minicab office appears in a tube station forecourt, the Taxi rank is moved away or revoked completely.

It is stated in this release that regular Taxi forums will be held for suburban drivers and their representatives. While this is welcome, the main body of Central London drivers would also like this facility extended to them, as no constructive reason was given to the suspension of our Taxi forums previously held at Palestra.

Again Hendy insults the trade by insinuating we haven't moved with the times. It must be pointed out that every new innovation seen in this industry has first been seen within the Licensed Taxi Trade. We would ask Sir Peter to point to one aspect of new technology Taxis do not incorporate.

And again, Hendy has jumped on the band wagon, insisting the Private Hire and TfL should be included in the world wide belief the London Taxis are the gold standard and the best Taxi service in the world....nice try Pete. Some one once said if you tell a lie long enough, eventually people will start to believe it's true.

In yesterday's meeting between Sir Peter Hendy and the GLA transport committee, it's been alleged Hendy made a couple of statements which if proven to be incorrect, could eventually compromised his highly paid position at TfL.

Uber Confusion:

Hendy was asked why Uber had been licensed, in the face of controversy over the way the fare is calculate. He answered that TfL had taken advice from an eminent QC who had stated that in his opinion the device Uber used to calculate the fare was not a meter.

He was asked who signed this advice and he replied he had forgotten the QC's name.

Assembly member Tom Copley asked Peter Hendy if he would publish the legal advice TfL received re Uber, showing the name of the eminent QC who gave it. Hendy said he would if he can, (meaning if there is no legal reason against doing so)

Just after this statement was made, a post appeared on Twitter claiming that both the LCDC and the LTDA were in possession of TfLs legal advice and that far from being signed by an eminent QC, it was in fact just an opinion given by TfLs own General Counsel - Howard Carter and is an investigating report.

However, this is not conclusive proof as the letter in possession of the LCDC and LTDA could have been written after TfL heard back from a QC.

Late last night, it was alleged by a Radio Circuit Tweet, that they've been told the QC involved is Martin Chamberlain QC (unconfirmed), a prominent human rights QC and not an expert in Taxi Law.

Utter Confusion:

Sir Peter also said he had recently booked a Hailo Taxi using their app. He explained Hailo had informed him they couldn't send him a Taxi, as none were available and instead they offered him a mini cab. He accepted and said the driver used an iPhone to calculate the fare.

As a result of that trip, TfL have since written to Hailo, asking for into about how the fare was calculated.

Immediately after the meeting Hailo put out this statement on their Blog:

To set the record straight – Hailo categorically does not use a time and distance meter within or out of our app. For all HailoExec journeys we calculate a fixed price based on distance travelled only. We have always sought active and thoughtful engagement with policymakers and Transport for London. We follow TfL’s directives on Private Hire. These are not our own rules.

When a customer specifies they want a HailoExec car at the start of a journey, they must provide a destination in advance and a fixed price is then quoted upfront. The screenshot below shows an example of the fixed price being quoted (£17) following the input of the destination (in this case Liverpool Street). Requiring destination from the customer and offering them a fixed price is fully in line with TfL directives.

In the case of a Hailo Backup journey, customers who ask for a black cab and are offered a HailoExec (because no taxi accepts) also get charged based on distance only. Distance only means point A (pick up) to point B (drop down). Both HailoExec and Hailo Backup customers travelling the same journey will ALWAYS get the same fare no matter what the traffic is like. We only send a HailoExec as a backup if the customer requests one.

We do not use a time and distance meter of any kind in determining HailoExec fares. Based on official statements from both TfL and the GLA we’re assured this is an acceptable practice that works within the directives put forward by TfL.

As a London-based company, we are committed to protecting and developing the black cab trade for the benefit of all working and travelling in London. We will continue to work in constructive partnership with regulators and policymakers in London to do just that.

Wednesday, February 25, 2015

City Hall was mashed out this morning, as London Taxi drivers packed out the gallery for the GLA's Transport Committee sitting to challenge TFLs Peter Hendy about their lack of positive management of Taxi and Private hire industries.

Chair of the committee Caroline Pidgeon, asks drivers in the gallery not to protest and to let the committee question Sir Peter Hendy about their concerns.

She added, that she hoped to get detailed and heavyweight answers from Hendy.

Sir Peter started the ball rolling by saying:

"Sometimes it's hard, as most laws are over 200 years old", he added "some trade concerns rise because the Assembly have pressed for more cycling & cleaner air".

It seemed Sir Peter laid most of the current problems being experienced, at the feet of the Assembly.

Hendy said Smart Phones had revolutionised the way things are done and what Londoners seemingly want. He said TfL had no plans to develope an industry wide app, it's a trade issue.

That's quite reassuring, after the mess TfL made of the CabWise app.

He went on to say people wanted to lay by credit card and that he couldn't stop Uber price surging. Again he stated that the trade needs to modernise.

Asked about recent stories in the papers he said "I don't believe anything that's written in the newspapers, including quotes from myself. The Taxi trade deserves a good future."

His claim that the Taxi trade was expanding prompted laughter from the gallery.

There was huge applause for Val Shawcross when she suggested senior TfL management were "out of touch" with the Taxi trade.

When asked about Boris Johnson's contact with the cab trades, Hendy said "The Taxi trade get more meetings than train and bus drivers get."

When questioned about openness, Hendy promised to speak to Boris about publishing minutes of his 'cabbies cabinet' sessions.

Speaking about the trades "fragmentation" Val Shawcross drew applause from the Cabbies suggesting there needed to be a clearer trade voice. Hendy agreed saying"It wouldn't half help if you could get some consensus."

So why the fragmentising engagement policy Sir Peter?

Picture from MayorWatch Twitter feed.

Victoria Borwick asks about having an AM attend the cabbies cabinet. Hendy says he'd "convey" the suggestion. Val Shawcross came back with, "rather than just convey, will you recommended it to him". Hendy says "on reflection" he will.

On displaying some kind of marking of PHV, Hendy says he supports and will look at it again, but in the past DVLA & DfT weren't keen last time it was explored.

Taxi drivers heckled when he said he needed to take account of views of executive car firms who wouldn't be pleased with a mandatory scheme.

The committee moved on to enforcement, Hendy read out a well prepared list of figures from TfL's website.

Baroness Jones said Assembly Police Committee will be looking at the Met's road and traffic command which helps enforce trade regs/laws.

When asked about enforcement of Pedicabs, Hendy said there was none due mainly to court ruling and stated that new government rules would make it even harder to deal with electric rickshaw bikes. He said he wants the power to licence Rickshaws and has asked council to draft a private members bill to be presented to Parliament in May this year.

When asked about mini cabs and touting Hendy said "it's harder to prove than assumed", to loud groans from the gallery.

The question that most cabbies had come to hear about, Uber.

Deputy Mayor Victoria Borwick asked are Uber using a Meter?

Hendy said TfL had asked a top QC if the app was a meter and was told it wasn't. Hendy then told the committee all about the Uber/TfL/LTDA court cases and added as a regulator he's happy to enforce any court ruling or law.

There were cheers and loud applause when Victoria Borwick said "we don't want Uber in London".

Hailo Sent Hendy A Minicab:

Interestingly Hendy said he had recently booked a Hailo Taxi using their app, where Hailo had said they couldn't send him a Taxi but instead offered him a mini cab which used an iPhone to calculate the fare. As a result of that trip, TfL have written to Hailo, asking for into about how the fare was calculated.

Sir Peter said he's been accused of taking bribery & backhanders, but added he doesn't like Uber and that they were not nice to him!

Support For Taxi Trade From Deputy Mayor

Deputy Mayor Victoria Borwick received huge applause from the gallery when she said taxi drivers have put 2 years into their trade, are disability aware & accessible & deserve support. She added "As a city, we have to decide what we want."

Hendy argued he has to deal with operators within the law, changes need legislation. He said some drivers just want to drive, but they have to adapt & embrace new tech or others will. He added that any new laws need to be "Future Proof".

Picture from MayorWatch Twitter Feed

Assembly Member Tom Copley got huge applause when he asked why TfL had stopped after getting just one legal opinion on Uber's legality. He said they've had been "soft" on Uber.

Hendy said this wasn't the case and that TfL wanted a court ruling to decide the issue definitively.

When asked if he would publish their legal advice on Uber Hendy said he would.

So where do we go from here, what next?

Editorial Comment : from Jim Thomas.

Taxi leaks would like to thank Chairperson Caroline Pidgeon and the whole of the GLA Transport Committee, for their continued support of the Taxi trade.

Uber Warned

One other thing Sir Peter mentioned, Uber intended to bring other practises to London (he didn't elaborate). He just said a warning had been put on their licence that they would be clearly acting illegally and would be revoked. He also said they already had a warning over driver with serious convictions.

Yet wasn't it TfL who authorise a wife killer fit and proper to do the knowledge a few years back?

A man who already held a PHV licence, having previously served time for killing his wife. Apparently as long as he took his medication TfL said the public were perfectly safe.

Some good news?

When asked about the backlog of 77 rank requests Hendy said there was lots of competition for road space but £600k had been put aside for Taxi ranks. When asked if TfL would work closer with boroughs to make this happen, he answered "We'll come back in 6 months and see where we are on this".

Complaint from Hendy:

We have been informed that Sir Peter Hendy complained about the behaviour of the Taxi drivers in the Gallery...but only after they had all left the building.

Complaint about Hendy:

Apparently the TfL Transport Commissioner had to be warned about swearing as a group of school children had taken seats after the cabbies had left.

LATE NIGHT EXTRA COMMENT:

Mayor Boris Johnston published a press release today, saying that TfL would invest £600,000 to raise the number of cab ranks by 20 per cent by 2020 - expanding the network to 500.

At present there is only one taxi rank per 100 Taxis. The new move from the mayor aims at increasing the ratio to one rank per 50 Taxis

TfL says it will ‘undertake a strategic review’ of rank provision across London – which will be completed by early 2016.

The plan also proposes exploring sponsorship of late night marshals at key taxi ranks.

If you couldn't make to the meeting this morning, sit back and listen to this recording made by Super Cabby Jamie Owens. Podcast is approx 1.5 hours long.